SNSW(SH:688117) Shanxi Securities·2024-09-11 16:07Investment Rating - The report assigns a "Buy-B" rating for the company, indicating a positive outlook for its stock performance in the coming months [1]. Core Views - The company is positioned as a leading player in the peptide industry, with steady growth driven by the increasing demand for GLP-1 peptide raw materials. The report highlights the company's ongoing investment in research and development, as well as its expanding production capacity for peptide raw materials [1][3]. Summary by Sections Company Performance - In the first half of 2024, the company reported revenue of 199 million yuan, representing a year-on-year increase of 14.4%. The net profit attributable to shareholders was 22 million yuan, up 8.1%, while the net profit excluding non-recurring items surged by 106.6% to 19 million yuan. Operating cash flow also increased by 56.0% to 26 million yuan [1]. Market Data - As of September 10, 2024, the company's stock closed at 28.73 yuan, with a year-to-date high of 34.40 yuan and a low of 16.46 yuan. The company has three R&D products registered for approval and is actively working on 18 projects [1]. Financial Projections - The company expects its revenue to grow from 568 million yuan in 2024 to 854 million yuan in 2026, with year-on-year growth rates of 30.6%, 24.0%, and 21.2% respectively. Net profit is projected to increase from 101 million yuan in 2024 to 153 million yuan in 2026, with growth rates of 42.9%, 24.7%, and 22.3% respectively [3][4]. Valuation Metrics - The report provides various financial metrics, including a projected P/E ratio decreasing from 32.1 in 2024 to 21.0 in 2026, and a P/B ratio declining from 3.4 to 2.7 over the same period. The company's gross margin is expected to decrease slightly from 61.7% in 2024 to 60.3% in 2026 [3][6]. Research and Development - The company has significantly increased its R&D expenditure, which reached 24 million yuan in the first half of 2024, marking an 80.9% increase. This investment is aimed at developing new peptide formulations and expanding its product pipeline [1][4]. Market Expansion - The company is expanding its product offerings in various therapeutic areas, including digestion, immunity, oncology, diabetes, obstetrics, and aesthetic medicine. The demand for GLP-1 raw materials is expected to drive further growth in the company's raw material and domestic formulation businesses [1][3].